Manage finance and legal
What does it mean to “manage finance & legal”?
Very early on in your startup journey — pretty much right after you have validated your business idea, you will need to start thinking about finance and legal issues.
You will dig deeper into understanding the story of your business from a numbers point of view. You will be faced with decisions about the legal structure of your business and contracts.
The ABC’s of managing finance and legal
Easier said than done, right? At District 3, we have broken this competency down into 5 main skills that need to be developed to demystify what is “managing finance and legal”. You need to be proficient in the following areas:
1. Build basic financial models
I can build a financial model that lets me forecast profitability (P&L forecast) and liquidity (cashflow forecast) and helps me identify the best possible sources of funding (balance sheet).
2. Calculate and track financial KPIs
I can identify and calculate the most important performance
measures for my startup, including but not limited to gross
profit, gross margin, EBITDA, net margin, CAC/LTV, burn rate and cash runway.
I can do my company’s bookkeeping using excel or a another software program to record my start-up’s transactions.
4. Manage basic legal
I can identify and manage the development of the legal
documents and structures needed at each stage of my startup
including corporate structure documents, shareholder
agreements, basic contracts, NDAs etc.
I can identify when and how I need to protect the IP of my startup.
Understanding the basics of how to manage the finance and legal aspects of your business will be important in your future and ongoing success as an entrepreneur.